KS Ltd, invited applications for issuing 1,60,000 equity shares of Rs 10 each at a premium of Rs 6 per share, The amount was payable as follows:
On application Rs 4 per share (including premium Rs 1 per share)
On Allotment Rs 6 per share (including premium Rs 3 per share)
On First and Final Call- Balance
Applications for 3,20,000 shares were received. Applications for 80,000 shares were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted sums due on allotment. Jain holding 800 shares failed to pay the allotment money. His shares were forfeited immediately after allotment. After wards the final call was made. Gupta who had applied for 1200 shares failed to pay the final call. His shares were also forfeited. Out of forfeited shares 1000 shares were reissued at Rs 8 per share fully paid up. The reissued shares included all the forfeited shares of Jain.
pass necessary journal entries for the above transaction in the books of KS Ltd.
Dear Student
Regards
| Journal in the books of KS ltd. | |||||
| Date | Particulars | L.F. | Debit Amount (Rs) |
Credit Amount (Rs) |
|
| Bank A/c (3,20,000 x 4) | Dr. | 12,80,000 | |||
| To Share Application A/c | 12,80,000 | ||||
| (Received application money on 3,20,000 shares) | |||||
| Share Application A/c | Dr. | 12,80,000 | |||
| To Share Capital A/c (1,60,000 x 3) | 4,80,000 | ||||
| To To Securities Premium A/c (1,60,000 x 1) | 1,60,000 | ||||
| To Bank A/c (80,000 x 4) | 3,20,000 | ||||
| To Calls in Advance A/c | 3,20,000 | ||||
| (Being 80,000 applications rejected and remaining 2,40,000 shares allotted on Pro Rata basis) | |||||
| Share Allotment A/c (1,60,000 x 6) | Dr. | 9,60,000 | |||
| To Share Capital A/c (1,60,000 x 3) | 4,80,000 | ||||
| To Securities Premium A/c (1,60,000 x 3) | 4,80,000 | ||||
| (Allotment due on 1,60,000 shares at a premium of Rs 3 per share) | |||||
| Bank A/c | Dr. | 6,36,800 | |||
| Call in Arrears A/c | 3,200 | ||||
| Calls in Advance A/c | 3,20,000 | ||||
| To Share Allotment A/c | 9,60,000 | ||||
| (Being Allotment money received and adjusted against call in advance, Jain holding 800 shares failed to pay allotment money) | |||||
| Share Capital A/c (800 x 6) | Dr. | 4,800 | |||
| Securities Premium A/c (800 x 3) | Dr. | 2,400 | |||
| To Calls in arrears A/c | 3,200 | ||||
| To Share Forfeiture A/c | 4,000 | ||||
| (Forfeiture of 800 shares of Jain for non-payment of Allotment money) | |||||
| Share First and Final Call A/c (1,59,200 x 6) | Dr. | 9,55,200 | |||
| To Share Capital A/c (1,59,200 x 4) | 6,36,800 | ||||
| To Securities Premium A/c (1,59,200 x 2) | 3,18,400 | ||||
| (Call money due on 1,59,200 shares) | |||||
| Bank A/c (1,58,400 x 6) | Dr. | 9,50,400 | |||
| Calls in arrears A/c ( 800 x 6) | 4,800 | ||||
| To Share First and Final A/c | 9,55,200 | ||||
| (Received call money on 1,58,400 shares and call money on 800 shares pending) | |||||
| Share Capital A/c (800 x 10) | Dr. | 8,000 | |||
| Securities Premium A/c (800 x 2) | Dr. | 1,600 | |||
| To Calls in arrears A/c | 4,800 | ||||
| To Share Forfeiture A/c | 4,800 | ||||
| (Forfeiture of 800 shares of Gupta for non-payment of First and Final Call money) | |||||
| Bank A/c (1000 x 8) | Dr. | 8,000 | |||
| Share Forefeiture A/c (1,000 x 2) | 2,000 | ||||
| To Share Capital A/c | 10,000 | ||||
| (Reissue of 1000 shares at Rs 8 per share) | |||||
| Share Forfeiture A/c | Dr. | 3,200 | |||
| To Capital Reserve A/c | 3,200 | ||||
| (Profit on re-issue of 1,000 transferred to Capital Reserve Account) | |||||
| Calculation For Jain Call in arrears on Allotment Call | ||
| Applications Alloted | 800 | |
| Applications Applied by Jain | ((800 x 2,40,000) / 1,60,000) | 1,200 |
| Total money Received from Jain on Applkication | (1200 x 4) | 4,800 |
| Application money Utilised | (800 x 4) | 3,200 |
| Advance money | (4,800 - 3,200) | 1,600 |
| Total Allotment money Due from Jain | (800 x 6) | 4,800 |
| Allotment Call adjusted adainst advance money | 1,600 | |
| Calls in arrears (Includes Full Securities premium of Rs 3 per share) | (4,800 - 1,600) | 3,200 |
| Calculation of Profit in Reissue | ||
| Total Share Forfeiture amount on 800 shares of Jain | 4,000 | |
| Share Forfeiture on 200 shares of Gupta | (4,800/800)x200 | 1,200 |
| Total Share Forfeiture amount on 1000 shares | 5,200 | |
| Less : Amount utilised in reissue from share forfeiture | 2,000 | |
| Amount of profit on Reissue | 3,200 | |
Regards